Government of Ghana v ProEnergy Services, LLC

Case No. 11-2714 (C.A. 8, May. 1, 2012)

The Government of Ghana filed an application for discovery pursuant to 28 U.S.C. § 1782, seeking documents exchanged in a separate lawsuit between the current defendants. Section 1782 allows federal courts to provide assistance in gathering evidence for use in foreign tribunals. Under § 1782(a), a district court of the district in which a person resides may order that person to produce documents in accordance with the Federal Rules of Civil Procedure. The district court granted Ghana's application and ordered the Missouri companies, ProEnergy Services, LLC and ProEnergy Services International, Inc. (collectively, "ProEnergy"), to produce documents. ProEnergy produced some documents and discovery materials from its lawsuit with Balkan Energy Company, but it refused other documents related to the settlement of that lawsuit. Ghana requested that the court direct ProEnergy to produce the settlement documents, but the district court denied Ghana's request. We affirm.

I.

The origins of this appeal are rooted in a dispute between Ghana and Balkan. In 2007, Balkan contracted with Ghana to refurbish and recommission a 125 megawatt power barge over a ninety-day period. Balkan initially hired ProEnergy as a subcontractor to complete the work, and for reasons not pertinent to the current appeal, ProEnergy left the job before finishing. At the end of the contracted ninety days, Ghana and Balkan each alleged that the other had failed to live up to its part of the agreement. Balkan commenced arbitration in The Hague, arguing that Ghana failed to properly connect the barge to the national power grid and failed to pay contracted fees. Ghana initiated a lawsuit in the Ghanaian High Court of Justice, arguing that Balkan failed to recommission the barge within the contracted time frame and damaged the barge such that it has never become operational.

While these foreign actions were pending, Balkan was also involved in a domestic suit against ProEnergy. Balkan and ProEnergy each filed competing claims relating to the other's performance on the refurbishment project, and the dispute was eventually consolidated in the Western District of Missouri. In its Missouri litigation, Balkan argued that ProEnergy had performed its work negligently and damaged the barge and that ProEnergy was untimely in its efforts. However, in the foreign litigation, Balkan claims that the refurbishment of the barge was completed on time and that the barge would have been fully operational but for failures on the part of Ghana. Noting that Balkan's Missouri claims seemed to contradict, or at least conflict with, its international claims, Ghana sought discovery assistance from the Western District of Missouri. Ghana's § 1782 application sought from ProEnergy—which is not a party to either the arbitration in The Hague or the suit before the Ghanaian High Court of Justice—all documents related to its lawsuit with Balkan.

cumulative or prejudicial under fed. r. evid. 403. see goodyear tire & rubber co. discovery in a federal district court for use in a foreign court. once the court has record "lacked a sufficient factual context within which to evaluate" whether jaffee party must also demonstrate prejudice." hofer v. mack trucks, inc., 981 f.2d 377, from its lawsuit with balkan, and because proenergy is not party to the foreign policy of rule 408 requires exclusion when a permissible purpose can be discerned." could or should have found the settlement agreement discoverable; it must reconsider its order granting the application. proenergy also moved for a protective 381–82 (8th cir. 1992) (citations omitted); see also miscellaneous docket matter no. appellate courts review a district court's decision on a § 1782 application for accordance with the federal rules of civil procedure. the district court1 under the federal rules, any unprivileged3 failed to properly connect the barge to the national power grid and failed to pay government of ghana, * discretion resulting in fundamental unfairness in the trial of the case.'" tenkku v. micro devices, inc., 542 u.s. 241, 264–66 (2004) (describing the discretionary states, 78 fed. cl. 15 (fed. cl. 2007), a plaintiff challenging an irs order issued a * discovery in u.s. courts in accordance with federal rules. see intel corp. v. advanced litigation, we are not persuaded that any fundamental unfairness was caused by the demonstrate a gross abuse of discretion. ghana believes that the district court abused overly burdensome, the court noted the importance of the movant's non-party status; authorizes, but does not require, discovery assistance" and instructing the lower court discovery request for settlement documents because intended use under rule 408(b) should be directed to produce those settlement documents. after establishing that relationship between these companies, in part because of the u.s. corporation's provides for a threshold determination of whether to allow foreign litigants to enjoy although ghana argues that proenergy's settlement was with a subsidiary of watt power barge over a ninety-day period. balkan initially hired proenergy as a requested, and the court stated that it would schedule a telephone conference to the district in which a person resides may order that person to produce documents in held a brief telephone conference on july 21, 2011, to resolve whether proenergy id. at 24–25. in the present case, ghana has not demonstrated an unsuccessful attempt balkan and proenergy are relevant to the foreign litigation, we are not convinced the evid. 408(a). it would seem, therefore, that federal rules would not allow ghana to 4 rejected balkan's motion for reconsideration on june 6, 2011. those orders are not district of missouri. ghana's § 1782 application sought from proenergy—which is balkan at the arbitration in the hague, and that it could therefore use the documents domestic suit against proenergy. balkan and proenergy each filed competing claims "settlement privilege." we have not had occasion to consider whether a settlement asking for the assistance of a district court. see in re metallgesellschaft ag, 121 f.3d be admissible in court, but it concluded that it was relevant to the plaintiff's argument lawsuit with balkan energy company, but it refused other documents related to the to obtain the information from balkan, or any legal protection balkan could invoke appeal, proenergy left the job before finishing. at the end of the contracted ninety by proenergy. federal rules prohibit the use of settlement documents at trial to prove quotation marks omitted)). ghana has not demonstrated it needs to discover the ___________ ghana's application and ordered the missouri companies, proenergy services, llc 3 movant - appellant, * ___________ while these foreign actions were pending, balkan was also involved in a have no reason to assume that the district court intended to acknowledge a novel claim the agreement. balkan commenced arbitration in the hague, arguing that ghana 1 v. micellaneous docket matter no. 2, 197 f.3d 922, 925 (8th cir. 1999) (noting that has already produced most of the documents, depositions, and interrogatory answers for the eighth circuit our normal review of discovery orders—not by a standard established by § 1782. see ghana has established its threshold need for § 1782 assistance, but instead whether (quoting walton v. arizona, 497 u.s. 639, 653 (1990))). although proenergy has although it is true that documents need that discovery is being sought for use in a foreign court cleared away, section 1782 proenergy was not involved in the foreign litigation and that it had already produced 633 f.3d 591, 597 (7th cir. 2011) ("the section 1782 screen—the judicial inquiry that rule civ. proc. 26(b)(2) and (c)" when determining "what, if any, assistance is afterconferringwithcounselforghana,proenergyproducedcourtdocuments and that the barge would have been fully operational but for failures on the part of 1782. however, § 1782 does not establish a standard for discovery. instead, it heraeus, 633 f.3d at 597–99; see also intel, 542 u.s. at 266 (noting "that § 1782(a) principles . . . in the light of reason and experience," see jaffee v. redmond, 518 u.s. 1 to privilege. see united states v. robertson, 606 f.3d 943, 960 (8th cir. 2010) ("we discovery arena the trial judge's discretion is particularly broad), then the complaining claim or defense is generally discoverable. fed. r. civ. p. 26(b)(1). however, ghana has demonstrated that the district court abused its discretion by limiting that that it declined to compel production because the documents were entitled to a in dispute. in denying proenergy's motion for a protective order, however, the court could be satisfied). believe ghana was entitled to the settlement documents. on july 22, the district court * appeal from the united states the relevant practices and procedures for the taking of testimony and the production the statute requires—is designed for preventing abuses of the right to conduct ghana cites to only one case in which a court compeled a non-party to produce v. * district court for the that would require it to seek discovery of the documents in the foreign forum before and damaged the barge such that it has never become operational. not a party to either the arbitration in the hague or the suit before the ghanaian high later, on february 11, balkan and proenergy settled their dispute and the missouri the government of ghana filed an application for discovery pursuant to 28 many court documents from the balkan lawsuit, the court indicated that it did not district court declining to compel production of the settlement documents. lawsuit was soon thereafter dismissed with prejudice. on february 24, balkan moved matter that is relevant to a party's court "will not reverse a district court's discovery ruling 'absent a gross abuse of to avoid discovery. district of missouri. -5- application). the manner in which discovery proceeds will be determined by normal "[a]ppellate review of a district court's discovery rulings is 'both narrow and subcontractor to complete the work, and for reasons not pertinent to the current document would be prohibited at trial. f.3d 976 (6th cir. 2003). we do not address the merits of such a claim. see in re abuse of discretion. united kingdom v. united states, 238 f.3d 1312, 1319 (11th cir. 740, 754–55 (d.c. cir. 2006) (declining to address settlement privilege where the protective order, noting that proenergy had made no attempts to confer with ghana's -6- melloy, circuit judge. ghana contends that the district court's phone-conference statements indicated by the sixth circuit in goodyear tire & rubber co. v. chiles power supply, inc., 332 presume that 'trial judges know the law and . . . apply it in making their decisions.'" granted litigation, balkan claims that the refurbishment of the barge was completed on time district court's decision to limit which documents must be produced is governed by ghana argues that representatives of proenergy may testify on behalf of and proenergy services international, inc. (collectively, "proenergy"), to produce request did not meet the broad and permissive standard of discovery established in § even assuming documents that indicate the distribution of liability between the origins of this appeal are rooted in a dispute between ghana and balkan.2 "even if relevant, discovery is not permitted where no need is shown" (internal a relevant settlement agreement. in jz buckingham investments llc v. united on february 7, 2011, the district court granted ghana's application. four days subpoena to a non-party, seeking information on how the irs had calculated a penalty "balkan." on the name "balkan": a limited liability company formed in the united kingdom, its narrow, and it is not sufficient for ghana to merely demonstrate that the district court resolve matters if the parties could not come to an agreement. was denied), he also had demonstrated that the irs could invoke the protection of settlement agreement with balkan. ghana appeals. discovery is authorized under § 1782, the federal rules, fed. r. civ. p. 26–36, contain services international, inc.; balkan * its claim that balkan did not deliver a fully operational barge on time. yet ghana not be admissible in court to be discoverable under 26(b)(1), it generally is not an no. 11-2714 filed: may 1, 2012 ___________ would render discovery of thesettlementagreementoutsidethe coercive power of the court instructed counsel for both sides to confer in good faith regarding the documents ghana argues that the district court erred in its ruling because settlement requests for production of documents. however, proenergy refused to produce (alterations and quotation omitted)). petroleum, inc., 948 f.2d 1542, 1546 (10th cir. 1991) ("the risks of prejudice and submitted: february 16, 2012 2 2003) (quoting moran v. clarke, 296 f.3d 638, 650 (8th cir. 2002) (en banc)). the v. chiles power supply, inc., 332 f.3d 976, 982–83 (6th cir. 2003) (denying deferential.'" roberts v. shawnee mission ford, inc., 352 f.3d 358, 360 (8th cir. filed its order denying ghana's request for documents relating to proenergy's ___________ 2001). ghana argues that the district court abused its discretion by ruling that ghana's -4- normandy bank, 348 f.3d 737, 743 (8th cir. 2003) (quoting mcgowan v. gen. liability or to impeach through inconsistent statements or contradiction. see fed. r. barge and that proenergy was untimely in its efforts. however, in the foreign -9- directed both parties to confer about the requested documents. thus, on appeal, the in 2007, balkan contracted with ghana to refurbish and recommission a 125 mega- however, the plaintiff demonstrated his need to obtain the information from the non- hague. ghana is correct to note that there is no exhaustion requirement under § 1782 confused relationship between those entities does not bear on the narrow review relating to the other's performance on the refurbishment project, and the dispute was * western district of missouri. contracted fees. ghana initiated a lawsuit in the ghanaian high court of justice, incorporated. although the parties have discussed the implications that arise out of current defendants. section 1782 allows federal courts to provide assistance in counsel to resolve the discovery dispute, as required by fed. r. civ. p. 26(c)(1). the district court committed reversible error by limiting discovery. "if a party can the settlement documents, but the district court denied ghana's request. we affirm. united states court of appeals recognize novel privileges under fed. r. evid. 501 by examining "common law ______________________________ about inconsistent treatment. id. at 20. in considering whether the subpoena was demonstrate a gross abuse of discretion by the trial court (bearing in mind that in the court of justice—all documents related to its lawsuit with balkan. balkan argued that proenergy had performed its work negligently and damaged the inability to correctly identify for the district court the state in which it was determinedthatsuchabusesareunlikely,theordinarytoolsofdiscoverymanagement, the honorable scott o. wright, united states district judge for the western balkan that was not party to the contract with ghana, it has not demonstrated why this proenergy services, llc; proenergy * -7- currently before this court. for convenience, we will refer to them collectively as with, its international claims, ghana sought discovery assistance from the western confusion entailed in receiving settlement evidence are such that often the underlying to establish bias or prejudice under fed. r. evid. 408(b). however, ghana has not arguing that balkan failed to recommission the barge within the contracted time frame 77, 79 (2d cir. 1997). however, as outlined above, our review is not of whether federal regulations preventing it from disclosing confidential taxpayer information. the district court permitted balkan's intervention, but on june 6, 2011, denied defendants - appellees. * documents in question from proenergy—who is not party to either foreign details about how balkan and proenergy resolved their dispute will directly bear on agreements are routinely found relevant. however, our review of discovery orders is described the settlement documents as "confidential," proenergy does not appear to use the documents in the manner it desires.4 ii. 5 appropriate."). dynamics corp., 794 f.2d 361, 363 (8th cir. 1986)). accordingly, we affirm the decision of the district court. before loken, bye, and melloy, circuit judges. documents would add to the impeachment value of the documents already produced -3- privilege exists within this circuit. although federal courts possess the authority to u.s.c. § 1782, seeking documents exchanged in a separate lawsuit between the its motion for reconsideration. the court also denied proenergy's motion for a indicated that discovery would proceed in accordance with the federal rules, and ask our court to acknowledge a settlement privilege, like the privilege acknowledged drops out."). abuse of discretion for a district court to deny discovery when the intended use of a ___________ gathering evidence for use in foreign tribunals. under § 1782(a), a district court of there are three different companies involved in this dispute bearing variations energy company, * eventually consolidated in the western district of missouri. in its missouri litigation, factors a district court may consider when deciding whether to grant a § 1782 party. not only had the plaintiff originally sought the information from the irs (and does not need to demonstrate the allocation of blame between balkan and proenergy -8- of documents." (internal quotation omitted); heraeus kulzer, gmbh v. biomet, inc., ghana. noting that balkan's missouri claims seemed to contradict, or at least conflict subsidiary in ghana, and a u.s. corporation. there has been confusion about the litigation—instead of directly from balkan.5 it imposed on that non-party. the court questioned whether such information would the various contractual agreements entered into by each of the balkan entities, the -2- to establish that balkan failed to deliver a fully operational barge. documents relating to the final settlement agreement with balkan. the district court to consider "the controls on discovery available to the district court, see, e.g., fed. establish such a bias, and why the settlement documents would not therefore be how balkan and proenergy assessed their allocation of liability. ghana asserts that order to shield itself from ghana's discovery request. impeachment purposes. ghana has not, however, demonstrated that the settlement assistance, and whether ghana was prejudiced by that decision. because proenergy settlement of that lawsuit. ghana requested that the court direct proenergy to produce to intervene in ghana's request for discovery assistance and moved to have the court explained why the court documents already produced would be insufficient to its discretion by denying discovery of documents that may reveal information about subpoenaducestecumissuedtocommodityfuturestradingcommission,439f.3d discovery rules. see weber v. finker, 554 f.3d 1379, 1384 (11th cir. 2009) ("once 1, 8 (1996), the district court offered no analysis regarding a settlement privilege. we * was unnecessary and therefore more prejudicial than probative); eeoc v. gear the primary use ghana identifies for the settlement documents is for days, ghana and balkan each alleged that the other had failed to live up to its part of the district court granted ghana's § 1782 application on february 7, 2011 and i. exchanged from its suit with balkan, such as depositions, interrogatory answers, and including [fed. r. civ. p.] 26, come into play; and with objections based on the fact documents. proenergy produced some documents and discovery materials from its